CNN
–
BMW recently announced a $1.7 billion investment to help equip its massive plant in Spartanburg, South Carolina, to produce electric cars and SUVs. This amount included $700 million to build a nearby battery manufacturing plant.
Spartanburg is the largest BMW manufacturer anywhere in the world. It employs 11,000 people and produces 40,000 SUVs annually, of which only 40% are sold in North America. The rest is exported to 120 other countries.
It’s one of a number of such announcements in recent months and years as automakers prepare to start producing more electric cars. Mercedes, Hyundai, Honda, and others have also announced battery plant construction projects in recent months. BMW’s announcement came after the Biden administration passed the Inflation Cut Act, which limits tax incentives For electric vehicles for those who largely use US battery manufacturing and raw material supply.
The rules allow consumer tax breaks only for electric vehicles that meet increasingly stringent targets for making the same cars in the United States, as well as their batteries. They also require US sourcing of raw materials for batteries and cap the cost of vehicles and buyers’ income. Buyers can only get full tax credits if they and the vehicles meet the requirements.
This type of regulation had no bearing on BMW’s decision to locate battery production in South Carolina, Oliver Zipps, president of BMW, said in an interview with CNN Business. Simple logistics was a much more important factor.
“You wouldn’t fly hundreds of kilograms of batteries around the world or put them on a ship,” he said. “You won’t. You’ll translate anyway.”
Zipse said the IRA rules were not only driving US manufacturing needlessly, but they also risk negative repercussions for the American jobs they are designed to protect.
The IRA offers no benefit to vehicles, no matter how “made in America”, if they are not sold within the United States. More importantly, though, protective regulations that try to isolate US-made vehicles for US buyers could lead to retaliation, putting the valuable export business at risk, Zipse said.
“You can never make a list without looking at the consequences from other regulators,” he said. “And I’m just warning we’re getting a one-on-one slate.”
Put simply, in practice, it’s hard to isolate the automaker’s supply chains the way the IRA seems to be asking, Zipse said.
“The assumption that you can stimulate an industry that is entirely from the ground up within one region of the world, in such a complex industry, like the auto industry, is a false assumption,” he said.
Zipse also warned of the potential unintended consequences of regulations, such as those in some US states and Europe, that ban sales of zero-emissions vehicles after a certain date. For one thing, it may mean that overall industry sales will decline.
“We don’t think this payment system will make up the full market at today’s scale,” he said.
Not all consumers will be able to have electric car chargers at home, Zipse said, much They could, alternatively, decide to keep their petrol cars for a longer period or buy used petrol cars.
Some automakers, such as BMW’s competitors, General Motors and Mercedes-Benz, appear unconcerned about the possibility of shrinking sales and have announced plans to go all-electric by a specific date in the future. BMW never said Publicly it only intends to manufacture electric cars after any given time.
Unlike some car manufacturers, such as GM and Volkswagen, who build electric cars on distinct engineering platforms that are very different from their gasoline-powered cars, BMW designs their cars so that they can be produced as electric, plug-in hybrids, or just gasoline-powered. BMW executives are promoting this type of flexibility to respond to market demands for different types of vehicles.
Instead, he said, regulators should gradually introduce stricter emissions limits while leaving it up to automakers on how best to reach those targets.And the As did the organizers in the past. So far, this approach has not stopped increasing global warming.
Zipse insisted that BMW could manage whatever regulators decided.
“We can ramp it up easily,” Zipse said of the increased regulatory demand for electric vehicles. “All of our factories are qualified to build electric vehicles. We have a flexible approach.”
Originally published at San Jose News Bulletin
No comments:
Post a Comment